BOFIT Viikkokatsaus / BOFIT Weekly Review 2015/39
The outflow of capital from China in recent months has picked up, due e.g. to uncertainty in the stock market and foreign currency markets. In response, the central bank has sought to offset depreciation pressures on the yuan through interventions in the currency markets and by tightening regulations. Easing restrictions on foreign borrowing could help increase capital imports, which would offset capital outflows. Over the short term, foreign borrowing of Chinese firms is unlikely to increase rapidly as any interest in borrowing is restrained by the expectations of yuan depreciation and recent declines in interest rates at home.
China’s total foreign debt in March 2015 amounted to $1.67 trillion, of which about 25 % consisted of long-term debt and 75 % debt with maturities of less than a year.